Gupta Ltd. issued 1,000 equity shares of ₹100 each as fully paid-up, to the vendor, in consideration of the purchase of plant and machinery worth ₹1,00,000. Which of the following entry will be recorded in the company's journal for it?

Vendor A/c Dr. 1,00,000 To Share Capital A/c 1,00,000

The correct answer is option 4- Vendor A/c Dr. 1,00,000 To Share Capital A/c 1,00,000.

On purchase of plant & machinery, the journal entry will be-
Plant & Machinery A/c Dr. 1,00,000
   To Vendor A/c                             1,00,000

On issue of share, the journal entry will be-
Vendor A/c Dr. 1,00,000
          To Share Capital A/c 1,00,000